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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Liberty Global Ltd | NASDAQ:LBTYK | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.13 | 0.76% | 17.27 | 16.62 | 20.13 | 17.56 | 17.00 | 17.40 | 1,757,961 | 01:00:00 |
All full-year 2017 guidance targets confirmed for Liberty Global Group
Operating income down $227 million in Europe & $340 million at LiLAC
Q3 rebased OCF growth of 4% for Europe
LiLAC results impacted by hurricanes; guidance revised
LiLAC appoints new CEO; split-off on track for year-end 2017
Q3 LBTY REVENUE & YOY GROWTH3$3.9 bn I +3%
Q3 LBTY OCF & YOY GROWTH3$1.8 bn I +4%
NASDAQ:LBTYA | NASDAQ:LBTYB | NASDAQ:LBTYK
Q3 LiLAC REVENUE & YOY GROWTH3$0.9 bn I 0%
Q3 LiLAC OCF & YOY GROWTH3$0.4 bn I 0%
NASDAQ:LILA | OTC5:LILAB | NASDAQ:LILAK
Liberty Global plc today announced its Q3 financial and operating results for the Liberty Global Group1 and the LiLAC Group1.
CEO Mike Fries stated, "In Europe, we generated better top-line growth in the third quarter underpinned by continued double-digit revenue increases in our B2B2 business and sequential improvements in the U.K. and Belgium. Rebased3 OCF4 was up 4% in Q3, bringing year-to-date growth to 5% and supporting our guidance of 'around 5%' in Europe for the full year.
"The European market remains highly competitive, but our investments in the fastest broadband speeds, the coolest video apps and compelling quad-play bundles are allowing us to win share across our footprint. Organic RGU additions have exceeded 600,000 YTD, with a 60%7 improvement in video losses year over year. Meanwhile our mobile business delivered positive revenue growth in Q3, as we drive fixed-mobile convergence and upgrade our MNO networks and MVNO platforms.
"Virgin Media continues to gain operating momentum with rebased OCF growth of 4% in Q3, which represents our best performance this year. We had another record quarter of Project Lightning construction, which now reaches nearly 1 million marketable homes. The initial response to our November 2017 price increase has been encouraging, with reduced NPS8 impact and fewer price-related disconnects than a year ago. Growth in our Lightning areas and investment in our core subscriber base with products like the V6 box (now in ~20% of U.K. video homes) and our WiFi Connect Box (now in >40% of broadband homes), pushed U.K. RGU additions up to 322,000 YTD, a nearly four-fold increase from two years ago. With new prices taking effect in the fourth quarter we expect ARPU9 uplift to drive better top-line results in the final months of the year and into 2018."
Concerning LiLAC, Mike Fries stated, "I am very pleased to have announced Balan Nair as the new President and CEO of our Latin American business. He will add tremendous value and focus, especially as we manage through the damage from Hurricanes Maria and Irma. We've begun the work of restoring our fixed and mobile networks in the affected markets, primarily Puerto Rico, as we make good operational strides elsewhere in the region with 40,000 organic RGU additions in Q3. VTR in Chile had a particularly strong quarter across the board, adding 19,000 RGUs while delivering 6% rebased revenue and 9% rebased OCF growth.
Our long-term opportunity in Latin America continues to be exciting and we remain on track for the split-off to LiLAC shareholders around the end of the year."
Liberty Global Group Highlights
LiLAC Group Highlights
• NEW HOMES BUILT YTD 2017 800k+
• VTR Q3 OCF GROWTH3 +9%
• Q3 B2B REVENUE GROWTH3 +13%
• Q3 ORGANIC RGU ADDITIONS 40,000
• Q3 ORGANIC RGU6 ADDITIONS 204,000
• BALAN NAIR APPOINTED LILAC CEO
About Liberty Global
Liberty Global is the world’s largest international TV and broadband company, with operations in more than 30 countries across Europe, Latin America and the Caribbean. We invest in the infrastructure that empowers our customers to make the most of the digital revolution. Our scale and commitment to innovation enable us to develop market-leading products delivered through next-generation networks that connect our over 24 million customers who subscribe to over 50 million television, broadband internet and telephony services. We also serve over 10 million mobile subscribers and offer WiFi service across 10 million access points.
Liberty Global’s businesses are comprised of two stocks: the Liberty Global Group (NASDAQ: LBTYA, LBTYB and LBTYK) for our European operations, and the LiLAC Group (NASDAQ: LILA and LILAK, OTC Link: LILAB), which consists of our operations in Latin America and the Caribbean.
The Liberty Global Group operates in 12 European countries under the consumer brands Virgin Media, Unitymedia, Telenet and UPC. The Liberty Global Group also owns 50% of VodafoneZiggo, a Dutch joint venture, which has 4 million customers, 10 million fixed-line subscribers and 5 million mobile subscribers. The LiLAC Group operates in over 20 countries in Latin America and the Caribbean under the consumer brands VTR, Flow, Liberty, Más Móvil and BTC. In addition, the LiLAC Group operates a sub-sea fiber network throughout the region connecting over 40 markets.
European Highlights Q3 2017
Liberty Global Group (Europe)
Q3 2017
YoYGrowth/(Decline)*
YTD 2017
YoYGrowth/(Decline)*
Subscribers
Organic RGU Net Additions 204,400 (23.7 %) 610,600 (12.9 %)Financial (in USD millions, unless noted)
Revenue $ 3,879 2.5 % $ 11,061 2.1 % OCF $ 1,836 3.9 % $ 5,174 4.6 % Operating income $ 537 (29.7 %) $ 1,452 (19.3 %) Adjusted FCF15 $ 715 28.0 % $ 707 (27.1 %) Cash provided by operating activities $ 1,229 $ 3,640 Cash provided (used) by investing activities $ (458 ) $ 507 Cash used by financing activities $ (295 ) $ (3,740 )* For the RGU growth rates, the Netherlands is excluded from the 2016 figures; Revenue and OCF YoY growth rates are on a rebased basis.
LiLAC Highlights Q3 2017
LiLAC Group Guidance Update
Liberty Latin America & Caribbean
Q3 2017
YoYGrowth/(Decline)*
YTD 2017
YoYGrowth/(Decline)*
Subscribers
Organic RGU Net Additions 39,500 45.2 % 97,100 3.1 %Financial (in USD millions, unless noted)
Revenue $ 908 0.4 % $ 2,740 0.7 % OCF $ 359 0.2 % $ 1,081 (0.2 %) Operating income (loss) $ (202 ) N.M. $ 95 (46.5 %) Adjusted FCF $ (110 ) N.M. $ (54 ) N.M. Cash provided by operating activities $ 94 $ 393 Cash used by investing activities $ (201 ) $ (454 ) Cash provided by financing activities $ 35 $ 37* Revenue and OCF YoY growth rates are on a rebased basisN.M. - Not Meaningful
Subscriber Growth - Liberty Global Group (Europe)
Three months ended Nine months ended September 30, September 30, 2017 2016 2017 2016 Organic RGU net additions (losses) by product (excluding NL7) (excluding NL7) Video (30,800 ) (19,300 ) (62,000 ) (156,500 ) Data 132,900 163,700 387,400 459,700 Voice 102,300 123,400 285,200 398,100 Total Liberty Global Group 204,400 267,800 610,600 701,300 Organic RGU net additions (losses) by market U.K./Ireland 92,400 80,400 328,500 223,400 Belgium/Luxembourg (14,600 ) 3,700 (41,900 ) 27,600 Germany 68,100 89,400 174,300 222,300 Switzerland/Austria (7,300 ) (3,700 ) 900 (25,400 ) Central and Eastern Europe 65,800 98,000 148,800 253,400 Total Liberty Global Group 204,400 267,800 610,600 701,300 Organic Mobile SIM18 additions (losses) by product Postpaid 75,400 102,200 265,300 285,500 Prepaid (27,600 ) (57,000 ) (193,500 ) (176,000 ) Total Liberty Global Group 47,800 45,200 71,800 109,500 Organic Mobile SIM additions (losses) by market U.K./Ireland (16,200 ) 8,800 (20,300 ) 18,000 Belgium 43,400 12,100 43,800 21,200 Other 20,600 24,300 48,300 70,300 Total Liberty Global Group 47,800 45,200 71,800 109,500Revenue Highlights - Liberty Global Group (Europe)
The following table presents (i) revenue of each of our consolidated reportable segments for the comparative periods, and (ii) the percentage change from period to period on both a reported and rebased basis:
Three months ended Increase/(decrease) Nine months ended Increase/(decrease) September 30, September 30, Revenue 2017 2016 % Rebased % 2017 2016%
Rebased % in millions, except % amounts European Division: U.K./Ireland $ 1,617.1 $ 1,581.4 2.3 1.5 $ 4,687.6 $ 4,985.6 (6.0 ) 1.3 Belgium 759.1 693.4 9.5 2.5 2,106.5 2,010.9 4.8 1.5 Germany 703.7 639.4 10.1 4.6 1,988.6 1,900.0 4.7 4.9 Switzerland/Austria 456.0 439.3 3.8 1.1 1,314.8 1,319.7 (0.4 ) (0.5 ) The Netherlands — 681.8 (100.0 ) N.M. — 2,030.4 (100.0 ) N.M. Total Western Europe 3,535.9 4,035.3 (12.4 ) 2.2 10,097.5 12,246.6 (17.5 ) 1.8 Central and Eastern Europe 306.6 274.5 11.7 4.9 866.5 814.6 6.4 5.5 Central and other 35.4 (1.9 ) N.M. 10.3 95.7 (5.2 ) N.M. 3.9 Total European Division 3,877.9 4,307.9 (10.0 ) 2.5 11,059.7 13,056.0 (15.3 ) 2.1 Corporate and other 0.8 18.0 (95.6 ) (42.9 ) 1.7 47.8 (96.4 ) 13.3 Intersegment eliminations (0.2 ) (12.8 ) N.M. N.M. (0.2 ) (35.4 ) N.M. N.M. Total Liberty Global Group $ 3,878.5 $ 4,313.1 (10.1 ) 2.5 $ 11,061.2 $ 13,068.4 (15.4 ) 2.1N.M. - Not Meaningful
These results were primarily driven by the net impact of (i) the deconsolidation of our operations in the Netherlands in connection with the completion of our joint venture with Vodafone Group plc (the "VodafoneZiggo JV"), (ii) negative foreign exchange ("FX") movements on a YTD basis, mainly related to the strengthening of the U.S. dollar against the British pound and positive FX movements in Q3, mainly related to the strengthening of the Euro against the U.S. dollar, and (iii) organic revenue growth
Q3 2017 Rebased Revenue Growth - Segment Highlights
Operating Income - Liberty Global Group (Europe)
Operating Cash Flow Highlights - Liberty Global Group (Europe)
The following table presents (i) OCF of each of our consolidated reportable segments for the comparative periods, and (ii) the percentage change from period to period on both a reported and rebased basis:
Three months ended Increase/(decrease) Nine months ended Increase/(decrease) September 30, September 30, OCF 2017 2016 % Rebased % 2017 2016%
Rebased % in millions, except % amounts European Division: U.K./Ireland $ 721.2 $ 696.0 3.6 4.1 $ 2,079.5 $ 2,206.1 (5.7 ) 3.0 Belgium 356.7 311.1 14.7 6.1 972.4 892.2 9.0 6.6 Germany 444.6 408.0 9.0 3.5 1,240.2 1,187.7 4.4 4.6 Switzerland/Austria 272.3 273.4 (0.4 ) (2.8 ) 794.3 795.1 (0.1 ) (0.3 ) The Netherlands — 375.5 (100.0 ) N.M. — 1,107.5 (100.0 ) N.M. Total Western Europe 1,794.8 2,064.0 (13.0 ) 3.3 5,086.4 6,188.6 (17.8 ) 3.5 Central and Eastern Europe 137.6 120.4 14.3 6.8 371.5 345.9 7.4 6.0 Central and other (46.0 ) (77.0 ) (40.3 ) 12.7 (139.2 ) (243.7 ) (42.9 ) 13.9 Total European Division 1,886.4 2,107.4 (10.5 ) 4.0 5,318.7 6,290.8 (15.5 ) 4.2 Corporate and other (50.7 ) (47.4 ) 7.0 (7.6 ) (145.0 ) (162.6 ) (10.8 ) 7.7 Total Liberty Global Group $ 1,835.7 $ 2,060.0 (10.9 ) 3.9 $ 5,173.7 $ 6,128.2 (15.6 ) 4.6 OCF Margin20 47.3 % 47.8 % 46.8 % 46.9 %N.M. - Not Meaningful
These results were primarily driven by the net impact of (i) the deconsolidation of our operations in the Netherlands, (ii) organic OCF growth and (iii) the aforementioned impact of FX movements
Q3 2017 Rebased Operating Cash Flow Growth - Segment Highlights
Net Loss Attributable to Liberty Global Shareholders - Liberty Global Group (Europe)
Leverage and Liquidity - Liberty Global Group (at September 30, 2017)
Subscriber Growth - LiLAC Group*
Three months ended Nine months ended September 30, September 30, 2017 2016 2017 2016 Organic RGU net additions (losses) by product Video (3,900 ) 4,600 7,600 17,800 Data 34,700 29,500 96,500 85,700 Voice 8,700 (6,900 ) (7,000 ) (9,300 )Total LiLAC Group
39,500 27,200 97,100 94,200 Organic RGU net additions by segment C&W 20,200 9,200 14,500 15,700 Chile 19,000 13,200 78,200 66,200 Puerto Rico 300 4,800 4,400 12,300 Total LiLAC Group 39,500 27,200 97,100 94,200 Organic Mobile SIM additions (losses) by product Postpaid 6,300 18,200 28,800 29,800 Prepaid (36,000 ) (38,500 ) (53,300 ) (44,300 )Total LiLAC Group
(29,700 ) (20,300 ) (24,500 ) (14,500 ) Organic Mobile SIM additions (losses) by segment C&W (42,900 ) (34,100 ) (64,500 ) (35,300 ) Chile 13,200 13,800 40,000 20,800 Puerto Rico — — — — Total LiLAC Group (29,700 ) (20,300 ) (24,500 ) (14,500 )*For Puerto Rico and certain C&W markets that were significantly impacted by Hurricanes Irma and Maria, the net additions (losses) reflected in this section include Q3 activity through August 31, 2017. For additional information, see note 12 to the subscriber tables at the end of this release.
Revenue Highlights - LiLAC Group
On May 16, 2016, a subsidiary of Liberty Global acquired C&W. Accordingly, C&W has been included in our financial results under our U.S. GAAP accounting policies since the acquisition date. The following table presents (i) revenue of each of our consolidated reportable segments for the comparative periods and (ii) the percentage change from period to period on both a reported and rebased basis:
Three months endedIncrease/(decrease)
Nine months ended Increase/(decrease) September 30, September 30, Revenue 2017 2016 % Rebased % 2017 2016 % Rebased % in millions, except % amounts LiLAC Division: C&W $ 578.9 $ 568.5 1.8 1.2 $ 1,737.2 $ 854.1 103.4 (0.8 ) Chile 242.2 221.3 9.4 6.1 702.6 631.9 11.2 6.9 Puerto Rico 88.6 104.8 (15.5 ) (15.5 ) 303.6 315.6 (3.8 ) (3.8 ) Total LiLAC Division 909.7 894.6 1.7 0.5 2,743.4 1,801.6 52.3 0.7 Intersegment eliminations (1.6 ) (0.5 ) N.M. N.M. (3.5 ) (0.7 ) N.M. N.M. Total LiLAC Group $ 908.1 $ 894.1 1.6 0.4 $ 2,739.9 $ 1,800.9 52.1 0.7N.M. - Not Meaningful
The Q3 result reflects the inclusion of certain previously carved-out entities at C&W, exchange rate benefits and organic revenue growth. The YTD change was primarily driven by the acquisition of C&W in the second quarter of 2016
Q3 2017 Rebased Revenue Growth - Segment Highlights
Revenue grew across all regions with the exception of the Bahamas where we continue to be impacted by the entry of a new mobile competitor
By product: revenue growth was driven by (i) new contracts and increasing demand for bandwidth in our networks business, (ii) increased penetration of high-speed services in broadband and video and (iii) growth in managed services. This growth was partly offset by: (i) a decline in mobile where the impact of competition in the Bahamas was greater than our growth in Jamaica, and (ii) the structural decline in fixed voice services
We estimate that the negative impact from Hurricanes Irma and Maria on C&W's revenue in Q3 2017 was $3 million
Operating Income (Loss) - LiLAC Group
Operating Cash Flow Highlights - LiLAC Group
The following table presents (i) OCF of each of our consolidated reportable segments for the comparative periods and (ii) the percentage change from period to period on both a reported and rebased basis:
Three months ended Increase/(decrease) Nine months ended Increase/(decrease) September 30, September 30, OCF 2017 2016 % Rebased % 2017 2016 % Rebased % in millions, except % amounts LiLAC Division: C&W $ 223.9 $ 214.5 4.4 3.6 $ 661.1 $ 315.5 109.5 (3.0 ) Chile 98.0 86.9 12.8 9.4 281.9 245.0 15.1 10.6 Puerto Rico 39.6 56.1 (29.4 ) (29.4 ) 144.7 152.9 (5.4 ) (5.4 )Total LiLAC Division
361.5 357.5 1.1 — 1,087.7 713.4 52.5 (0.1 ) Corporate and other (2.1 ) (2.9 ) (27.6 ) (27.6 ) (6.4 ) (5.8 ) 10.3 10.3 Total segment OCF $ 359.4 $ 354.6 1.4 0.2 $ 1,081.3 $ 707.6 52.8 (0.2 ) OCF Margin 39.6 % 39.7 % 39.5 % 39.3 %The Q3 and YTD results were negatively impacted by a $5 million reversal in Q3 2016 of a previously-recorded provision and related indemnification asset in connection with a favorable ruling on an outstanding legal case in Puerto Rico
Q3 2017 Rebased OCF Growth - Segment Highlights
Net Loss Attributable to Liberty Global Shareholders - LiLAC Group
Leverage and Liquidity - LiLAC Group (at September 30, 2017)
Update on Impacts of Hurricanes Irma and Maria
Hurricanes Irma and Maria impacted a number of our markets in the Caribbean in September of 2017, resulting in varying degrees of damage to homes, businesses and infrastructure in these markets. The most extensive damage occurred in Puerto Rico and certain markets within C&W
We are committed to helping people across the Caribbean recover and rebuild. To that end:
Our assessment of the losses attributable to the hurricanes is ongoing and we expect to incur additional costs and losses in Q4 2017 and beyond, as we restore the damaged networks and reconnect customers. We are uncertain as to the timing and extent of our restoration and reconnection efforts. The estimates below are preliminary and are subject to change.
Liberty Puerto Rico
Cable & Wireless
LiLAC Insurance Program
Forward-Looking Statements and Disclaimer
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements with respect to our strategies, future growth prospects and opportunities; our expectations with respect to subscribers, revenue, ARPU per RGU, OCF and Adjusted FCF; statements regarding the impact of Hurricanes Irma and Maria on our operations in the Caribbean, our plans regarding the markets impacted by the hurricanes, the time it will take to restore services in the markets impacted by the hurricanes and the amount and timing of insurance proceeds; expectations with respect to the development, enhancement and expansion of our superior networks and innovative and advanced products and services; statements regarding our planned split-off of the businesses attributed to the LiLAC Group and the anticipated impacts and benefits of such transaction; future P&E additions as a percentage of revenue; expectations regarding our share buyback programs; the strength of our balance sheet and tenor of our third-party debt; and other information and statements that are not historical fact. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include events that are outside of our control, such as hurricanes and other natural disasters, the continued use by subscribers and potential subscribers of our and our affiliates’ services and their willingness to upgrade to our more advanced offerings; our and our affiliates’ ability to meet challenges from competition, to manage rapid technological change or to maintain or increase rates to subscribers or to pass through increased costs to subscribers; the effects of changes in laws or regulation; general economic factors; our and our affiliates’ ability to obtain regulatory approval and satisfy regulatory conditions associated with acquisitions and dispositions; our and affiliates’ ability to successfully acquire and integrate new businesses and realize anticipated efficiencies from acquired businesses; the availability of attractive programming for our and our affiliates’ video services and the costs associated with such programming; our and our affiliates’ ability to achieve forecasted financial and operating targets; the outcome of any pending or threatened litigation; the ability of our operating companies and affiliates to access cash of their respective subsidiaries; the impact of our operating companies' and affiliates’ future financial performance, or market conditions generally, on the availability, terms and deployment of capital; fluctuations in currency exchange and interest rates; the ability of suppliers and vendors (including our third-party wireless network providers under our MVNO arrangements) to timely deliver quality products, equipment, software, services and access; our and our affiliates’ ability to adequately forecast and plan future network requirements including the costs and benefits associated with network expansions; and other factors detailed from time to time in our filings with the Securities and Exchange Commission, including our most recently filed Form 10-K, as amended, and Form 10-Q. These forward-looking statements speak only as of the date of this release. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Nothing in this press release constitutes an offer of any securities for sale.
Footnotes
1 The Liberty Global ordinary shares and the LiLAC ordinary shares are tracking shares. Tracking shares are intended by the issuing company to reflect or “track” the economic performance of a particular business or “group,” rather than the economic performance of the company as a whole. The Liberty Global ordinary shares and the LiLAC ordinary shares are intended to “track” the economic performance of the Liberty Global Group and the LiLAC Group, respectively (each as defined and described below). For more information regarding the tracking shares, see note 1 to our condensed consolidated financial statements included in our Form 10-Q. While the LiLAC Group and the Liberty Global Group have separate collections of businesses, assets and liabilities attributed to them, neither group is a separate legal entity. The LiLAC Group comprises our operations in Latin America and the Caribbean and has attributed to it C&W, VTR and Liberty Puerto Rico. The Liberty Global Group comprises our businesses, assets and liabilities not attributed to the LiLAC Group, including Virgin Media, Unitymedia, UPC Holding, Telenet, our 50% interest in the VodafoneZiggo JV (from December 31, 2016) and Ziggo Group Holding (up to December 31, 2016). The condensed consolidated financial statements of Liberty Global are included in our Form 10-Q. For attributed financial information of the Liberty Global Group and the LiLAC Group, see Exhibit 99.1 to our Form 10-Q. 2 Total B2B includes subscription (SOHO) and non-subscription revenue. 3 The indicated growth rates are rebased for acquisitions, dispositions and FX. Please see Revenue and Operating Cash Flow for information on rebased growth. 4 Please see OCF Definition and Reconciliation for our Operating Cash Flow ("OCF") definition and the required reconciliations. 5 The Liberty Latin America and Caribbean ("LiLAC") B shares trade on the Over-the-Counter ("OTC") market. 6 Please see Footnotes for Operating Data and Subscriber Variance Tables for the definition of RGUs. Organic figures exclude RGUs of acquired entities at the date of acquisition and other nonorganic adjustments, but include the impact of changes in RGUs from the date of acquisition. All subscriber/RGU additions or losses refer to net organic changes, unless otherwise noted. 7 As we no longer consolidate the Netherlands effective December 31, 2016, we have removed the Netherlands from certain information presented for periods prior to December 31, 2016 to enhance comparability. 8 NPS stands for Net Promoter Score. 9 Average Revenue Per Unit (“ARPU”) refers to the average monthly subscription revenue (subscription revenue excludes interconnect, channel carriage fees, mobile handset sales, late fees and installation fees) per average customer relationship or mobile subscriber, as applicable. ARPU per average customer relationship is calculated by dividing the average monthly subscription revenue from residential cable and SOHO services by the average of the opening and closing balances for customer relationships for the period. ARPU per average mobile subscriber is calculated by dividing residential mobile and SOHO revenue for the indicated period by the average of the opening and closing balances for mobile subscribers for the period. Unless otherwise indicated, ARPU per customer relationship or mobile subscriber is not adjusted for currency impacts. ARPU per RGU refers to average monthly revenue per average RGU, which is calculated by dividing the average monthly subscription revenue from residential and SOHO services for the indicated period, by the average of the opening and closing balances of the applicable RGUs for the period. Unless otherwise noted, ARPU in this release is considered to be ARPU per average customer relationship or mobile subscriber, as applicable. Customer relationships, mobile subscribers and RGUs of entities acquired during the period are normalized. 10 Our next-generation video base consists of Horizon TV, TiVo (in the U.K.), Digital TV with a Horizon-like user interface (Yelo in Belgium) as well as Horizon-Lite set-top boxes. 11 Our residential fixed business consists of our fixed-line triple-play and DTH businesses, but excludes SOHO services. Residential fixed also excludes the framework services revenue from the VodafoneZiggo JV and our small Irish broadcasting businesses. 12 Liquidity refers to cash and cash equivalents plus the maximum undrawn commitments under subsidiary borrowing facilities, without regard to covenant compliance calculations. 13 Our gross and net debt ratios are defined as total debt and net debt to annualized OCF of the latest quarter. Net debt is defined as total debt less cash and cash equivalents. For purposes of these calculations, debt is measured using swapped foreign currency rates, consistent with the covenant calculation requirements of our subsidiary debt agreements, and, in the case of the Liberty Global Group, excludes the loans backed or secured by the shares we hold in ITV plc, Sumitomo Corporation and Lions Gate Entertainment Corp. 14 Our blended fully-swapped debt borrowing cost represents the weighted average interest rate on our aggregate variable- and fixed-rate indebtedness (excluding capital leases and including vendor financing obligations), including the effects of derivative instruments, original issue premiums or discounts and commitment fees, but excluding the impact of financing costs. 15 Please see Adjusted Free Cash Flow Definition and Reconciliation for information on Adjusted Free Cash Flow (“FCF”) and the required reconciliations. For more detailed information concerning our operating, investing and financing cash flows, see the condensed consolidated statements of cash flows included in our Form 10-Q. 16 Our aggregate unused borrowing capacity of $4.2 billion represents the maximum undrawn commitments under our subsidiaries' applicable facilities without regard to covenant compliance calculations. This consists of $3.2 billion attributed to the Liberty Global Group and $1.0 billion attributed to the LiLAC Group. Upon completion of the relevant September 30, 2017 compliance reporting requirements for our credit facilities, and assuming no further changes from quarter-end borrowing levels we anticipate that our subsidiaries' borrowing capacity would be $4.1 billion. This consists of $3.1 billion attributed to the Liberty Global Group and $1.0 billion attributed to the LiLAC Group. LiLAC cash of $531 million includes $286 million of cash held by C&W, substantially all of which is held by C&W subsidiaries. For information regarding limitations on C&W's ability to access this cash, see the discussion under "Material Changes in Financial Condition" in our Form 10-Q. 17 United States Generally Accepted Accounting Principles. 18 Please see Footnotes for Operating Data and Subscriber Variance Tables for the definition of mobile subscribers. 19 On February 11, 2016, Telenet acquired Telenet Group BVBA ("BASE"). 20 OCF margin is calculated by dividing OCF by total revenue for the applicable period. 21 For purposes of calculating our average tenor, total third-party debt excludes vendor financing.Balance Sheets, Statements of Operations and Statements of Cash Flows
The consolidated balance sheets, statements of operations and statements of cash flows of Liberty Global are included in our 10-Q. For attributed financial information of the Liberty Global Group and the LiLAC Group, see Exhibit 99.1 to our 10-Q.
Rebase Information
For purposes of calculating rebased growth rates on a comparable basis for all businesses that we owned during 2017, we have adjusted our historical revenue and OCF for the three and nine months ended September 30, 2016 to (i) include the pre-acquisition revenue and OCF of certain entities acquired during 2016 and 2017 in our rebased amounts for the three and nine months ended September 30, 2016 to the same extent that the revenue and OCF of such entities are included in our results for the three and nine months ended September 30, 2017, (ii) exclude the revenue and OCF of Ziggo Group Holding and a sports channel that were contributed to the VodafoneZiggo JV at the end of December 31, 2016, (iii) include revenue for the framework services agreement with the VodafoneZiggo JV and certain associated operating and SG&A expenses that had been allocated to our Netherlands segment during the 2016 periods in our rebased amounts for the three and nine months ended September 30, 2016 as if the framework services agreement had been in place at the beginning of 2016, (iv) exclude the revenue and OCF of multi-channel multi-point (microwave) distribution system subscribers in Ireland that have disconnected since we announced the switch-off of this service effective April 2016 for the nine months ended September 30, 2016 to the same extent that the revenue and OCF of these subscribers is excluded from our results for the nine months ended September 30, 2017 (v) exclude the revenue and OCF of two small disposals made in Belgium during Q1 2017 to the same extent that the revenue and OCF of these disposed businesses is excluded from our results for the three and nine months ended September 30, 2017 and (vi) reflect the translation of our rebased amounts for the three and nine months ended September 30, 2016 at the applicable average foreign currency exchange rates that were used to translate our results for the three and nine months ended September 30, 2017. We have included SFR and five small entities in whole or in part in the determination of our rebased revenue and OCF for the three months ended September 30, 2016. We have included C&W, SFR, BASE and five small entities in whole or in part in the determination of our rebased revenue and OCF for the nine months ended September 30, 2016. We have reflected the revenue and OCF of the acquired entities in our 2016 rebased amounts based on what we believe to be the most reliable information that is currently available to us (generally pre-acquisition financial statements), as adjusted for the estimated effects of (a) any significant differences between U.S. GAAP and local generally accepted accounting principles, (b) any significant effects of acquisition accounting adjustments, (c) any significant differences between our accounting policies and those of the acquired entities and (d) other items we deem appropriate. We do not adjust pre-acquisition periods to eliminate nonrecurring items or to give retroactive effect to any changes in estimates that might be implemented during post-acquisition periods. As we did not own or operate the acquired businesses during the pre-acquisition periods, no assurance can be given that we have identified all adjustments necessary to present the revenue and OCF of these entities on a basis that is comparable to the corresponding post-acquisition amounts that are included in our historical results or that the pre-acquisition financial statements we have relied upon do not contain undetected errors. The adjustments reflected in our rebased amounts have not been prepared with a view towards complying with Article 11 of Regulation S-X. In addition, the rebased growth percentages are not necessarily indicative of the revenue and OCF that would have occurred if these transactions had occurred on the dates assumed for purposes of calculating our rebased amounts or the revenue and OCF that will occur in the future. The rebased growth percentages have been presented as a basis for assessing growth rates on a comparable basis, and are not presented as a measure of our pro forma financial performance.
The following table provides adjustments made to the 2016 amounts to derive our rebased growth rates for the Liberty Global Group and the LiLAC Group:
Revenue OCFThree months endedSeptember 30,
Nine months endedSeptember 30,
Three months endedSeptember 30,
Nine months endedSeptember 30, 2016 2016 2016 2016 Liberty Global Group in millions Acquisitions $ 66.6 $ 233.6 $ 36.7 $ 102.7 Contribution of Ziggo Group Holding to the VodafoneZiggo JV and other dispositions (a) (695.4 ) (2,067.2 ) (377.2 ) (1,115.7 ) Foreign Currency 99.2 (402.1 ) 47.4 (171.3 ) Total decrease $ (529.6 ) $ (2,235.7 ) $ (293.1 ) $ (1,184.3 ) LiLAC Group Acquisitions $ 6.0 $ 908.5 $ 2.1 $ 370.9 Foreign Currency 4.5 12.3 2.0 4.9Total increase
$ 10.5 $ 920.8 $ 4.1 $ 375.8______________________________
(a) In connection with the December 31, 2016 closing of the VodafoneZiggo JV transaction, we entered into a framework services agreement that provides for the terms under which we provide services to the VodafoneZiggo JV. These adjustments to revenue and OCF are net of $34 million and $97 million of revenue for Q3 and YTD 2016, respectively, that we assumed would have been earned if the framework services agreement had been in place on January 1, 2016.OCF Definition and Reconciliation
As used herein, OCF has the same meaning as the term "Adjusted OIBDA" that is referenced in our Form 10-Q. OCF is the primary measure used by our chief operating decision maker to evaluate segment operating performance. OCF is also a key factor that is used by our internal decision makers to (i) determine how to allocate resources to segments and (ii) evaluate the effectiveness of our management for purposes of annual and other incentive compensation plans. As we use the term, OCF is defined as operating income before depreciation and amortization, share-based compensation, provisions and provision releases related to significant litigation and impairment, restructuring and other operating items. Other operating items include (a) gains and losses on the disposition of long-lived assets, (b) third-party costs directly associated with successful and unsuccessful acquisitions and dispositions, including legal, advisory and due diligence fees, as applicable, and (c) other acquisition-related items, such as gains and losses on the settlement of contingent consideration. Our internal decision makers believe OCF is a meaningful measure because it represents a transparent view of our recurring operating performance that is unaffected by our capital structure and allows management to (1) readily view operating trends, (2) perform analytical comparisons and benchmarking between segments and (3) identify strategies to improve operating performance in the different countries in which we operate. We believe our OCF measure is useful to investors because it is one of the bases for comparing our performance with the performance of other companies in the same or similar industries, although our measure may not be directly comparable to similar measures used by other public companies. OCF should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income, net earnings or loss, cash flow from operating activities and other U.S. GAAP measures of income or cash flows. A reconciliation of our operating income to total segment OCF is presented in the following table:
Three months ended Nine months ended September 30, September 30, 2017 2016 2017 2016 in millions Consolidated Liberty Global Operating income $ 335.8 $ 902.7 $ 1,546.9 $ 1,977.1 Share-based compensation expense 26.5 62.8 121.9 206.4 Depreciation and amortization 1,416.2 1,416.9 4,109.8 4,405.4 Impairment, restructuring and other operating items, net 416.6 32.2 476.4 246.9 Total segment OCF $ 2,195.1 $ 2,414.6 $ 6,255.0 $ 6,835.8 Liberty Global Group Operating income $ 537.3 $ 763.9 $ 1,451.7 $ 1,799.2 Share-based compensation expense 23.2 57.1 110.0 195.7 Inter-group fees and allocations (3.0 ) (2.2 ) (9.0 ) (6.4 ) Depreciation and amortization 1,216.5 1,216.2 3,523.3 4,026.3 Impairment, restructuring and other operating items, net 61.7 25.0 97.7 113.4 Total segment OCF $ 1,835.7 $ 2,060.0 $ 5,173.7 $ 6,128.2 LiLAC Group Operating income (loss) $ (201.5 ) $ 138.8 $ 95.2 $ 177.9 Share-based compensation expense 3.3 5.7 11.9 10.7 Inter-group fees and allocations 3.0 2.2 9.0 6.4 Depreciation and amortization 199.7 200.7 586.5 379.1 Impairment, restructuring and other operating items, net 354.9 7.2 378.7 133.5 Total segment OCF $ 359.4 $ 354.6 $ 1,081.3 $ 707.6Summary of Debt, Capital Lease Obligations & Cash and Cash Equivalents
The following table1 details the U.S. dollar equivalent balances of the outstanding principal amount of our debt, capital lease obligations and cash and cash equivalents at September 30, 2017:
Capital Debt & Capital Cash Lease Lease and Cash Debt2 Obligations Obligations Equivalents in millions Liberty Global and Liberty Global Group unrestricted subsidiaries $ 2,344.7 $ 70.5 $ 2,415.2 $ 1,456.5 Virgin Media3 16,858.2 78.3 16,936.5 57.1 UPC Holding 7,295.4 95.9 7,391.3 20.1 Unitymedia 8,771.7 715.1 9,486.8 1.7 Telenet 5,232.2 437.9 5,670.1 43.7 Total Liberty Global Group 40,502.2 1,397.7 41,899.9 1,579.1 LiLAC Group unrestricted subsidiaries — — — 40.6 C&W 3,917.8 18.0 3,935.8 285.6 VTR Finance 1,487.2 0.8 1,488.0 158.8 Liberty Puerto Rico 942.5 — 942.5 46.0 Total LiLAC Group 6,347.5 18.8 6,366.3 531.0 Total $ 46,849.7 $ 1,416.5 $ 48,266.2 $ 2,110.1Property and Equipment Additions and Capital Expenditures
The tables below highlight the categories of the property and equipment additions attributed to the Liberty Global Group and the LiLAC Group for the indicated periods and reconcile those additions to the capital expenditures that are presented in the attributed statement of cash flows information included in Exhibit 99.1 to our 10-Q.
Liberty Global Group
Three months ended Nine months ended September 30, September 30, 2017 2016 2017 2016 in millions, except % amounts Customer premises equipment $ 302.9 $ 207.3 $ 903.1 $ 673.4 New Build & Upgrade 323.7 218.8 819.0 573.4 Capacity 173.2 137.7 452.8 403.8 Baseline 291.7 208.4 648.9 602.1 Product & Enablers 196.7 175.4 552.6 435.7 Property and equipment additions (excluding the Netherlands) 1,288.2 947.6 3,376.4 2,688.4 The Netherlands — 138.0 — 421.2 Total property and equipment additions 1,288.2 1,085.6 3,376.4 3,109.6 Reconciliation of property and equipment additions to capital expenditures: Excluding the Netherlands: Assets acquired under capital-related vendor financing arrangements4 (655.6 ) (424.5 ) (1,934.1 ) (1,247.1 ) Assets acquired under capital leases (31.9 ) (31.4 ) (135.8 ) (73.0 ) Changes in current liabilities related to capital expenditures (167.9 ) (59.6 ) 70.9 (31.1 ) The Netherlands — (62.1 ) — (155.9 ) Total capital expenditures5 $ 432.8 $ 508.0 $ 1,377.4 $ 1,602.5 Property and equipment additions as % of revenue (excluding the Netherlands) 33.2 % 26.1 % 30.5 % 24.4 %LiLAC Group
Three months ended Nine months ended September 30, September 30, 2017 2016 2017 2016 in millions, except % amounts Customer premises equipment $ 32.6 $ 38.4 $ 114.2 $ 110.1 New Build & Upgrade 12.8 10.3 39.4 34.8 Capacity 7.3 8.2 25.0 30.5 Baseline 10.0 8.5 26.3 30.8 Product & Enablers 11.0 3.4 18.0 13.9 C&W P&E Additions 119.7 91.3 280.6 144.9 Property and equipment additions 193.4 160.1 503.5 365.0 Assets acquired under capital-related vendor financing arrangements (13.0 ) (16.7 ) (47.2 ) (33.7 ) Assets acquired under capital leases (1.2 ) (4.8 ) (3.7 ) (5.0 ) Changes in current liabilities and cash derivatives related to capital expenditures 20.0 22.3 (5.1 ) 16.2 Capital expenditures $ 199.2 $ 160.9 $ 447.5 $ 342.5 Property and equipment additions as % of revenue 21.3 % 17.9 % 18.4 % 20.3 %______________________________
1 Except as otherwise indicated, the amounts reported in the table include the named entity and its subsidiaries. 2 Debt amounts for UPC Holding, Telenet and C&W include notes issued by special purpose entities that are consolidated by the respective subsidiary.3
The Virgin Media borrowing group includes certain subsidiaries of Virgin Media, but excludes Virgin Media Inc. The cash and cash equivalents amount includes cash and cash equivalents held by the Virgin Media borrowing group, but excludes cash and cash equivalents held by Virgin Media Inc. This amount is included in the amount shown for Liberty Global and Liberty Global Group unrestricted subsidiaries. 4 Amounts exclude related VAT of $110 million and $64 million during the three months ended September 30, 2017 and 2016, respectively, and $311 million and $193 million during the nine months ended September 30, 2017 and 2016, respectively, that were also financed by our vendors under these arrangements. 5 The capital expenditures that we report in our condensed consolidated statements of cash flows do not include amounts that are financed under vendor financing or capital lease arrangements. Instead, these expenditures are reflected as non-cash additions to our property and equipment when the underlying assets are delivered, and as repayments of debt when the related principal is repaid.Adjusted Free Cash Flow Definition and Reconciliation
We define Adjusted Free Cash Flow as net cash provided by our operating activities, plus (i) cash payments for third-party costs directly associated with successful and unsuccessful acquisitions and dispositions and (ii) expenses financed by an intermediary, less (a) capital expenditures, as reported in our consolidated statements of cash flows, (b) principal payments on amounts financed by vendors and intermediaries and (c) principal payments on capital leases (exclusive of the portions of the network lease in Belgium and the duct leases in Germany that we assumed in connection with certain acquisitions), with each item excluding any cash provided or used by our discontinued operations. We believe that our presentation of Adjusted Free Cash Flow provides useful information to our investors because this measure can be used to gauge our ability to service debt and fund new investment opportunities. Adjusted Free Cash Flow should not be understood to represent our ability to fund discretionary amounts, as we have various mandatory and contractual obligations, including debt repayments, which are not deducted to arrive at this amount. Investors should view Adjusted Free Cash Flow as a supplement to, and not a substitute for, U.S. GAAP measures of liquidity included in our consolidated statements of cash flows. We changed our definition of adjusted free cash flow effective January 1, 2017 to remove the add-back of excess tax benefits from share-based compensation. This change, which was given effect for all periods presented, was made to accommodate our January 1, 2017 adoption of ASU 2016-09, Compensation - Stock Compensation, Improvements to Employee Share-Based Payment Accounting, pursuant to which we retrospectively revised the presentation of our condensed consolidated statements of cash flows to remove the operating cash outflows and financing cash inflows associated with excess tax benefits from share-based compensation. The following table provides the reconciliation of our net cash provided by operating activities to Adjusted Free Cash Flow for the indicated periods:
Three months ended Nine months ended September 30, September 30, 2017 2016 2017 2016 in millions Consolidated Liberty Global Net cash provided by operating activities $ 1,322.2 $ 1,375.7 $ 4,033.1 $ 4,045.5 Cash payments for direct acquisition and disposition costs 2.2 3.5 9.7 89.5 Expenses financed by an intermediary6 432.0 213.8 1,124.0 607.0 Capital expenditures (632.0 ) (668.9 ) (1,824.9 ) (1,945.0 ) Principal payments on amounts financed by vendors and intermediaries (493.6 ) (375.3 ) (2,614.9 ) (1,796.2 ) Principal payments on certain capital leases (25.7 ) (29.8 ) (73.4 ) (85.7 ) Adjusted FCF $ 605.1 $ 519.0 $ 653.6 $ 915.1 Liberty Global Group Net cash provided by operating activities $ 1,228.5 $ 1,254.0 $ 3,640.0 $ 3,818.0 Cash payments for direct acquisition and disposition costs 0.9 1.9 6.9 26.8 Expenses financed by an intermediary 422.5 212.7 1,067.1 605.9 Capital expenditures (432.8 ) (508.0 ) (1,377.4 ) (1,602.5 ) Principal payments on amounts financed by vendors and intermediaries (481.5 ) (375.3 ) (2,562.8 ) (1,796.2 ) Principal payments on certain capital leases (23.0 ) (27.0 ) (66.7 ) (82.2 ) Adjusted FCF $ 714.6 $ 558.3 $ 707.1 $ 969.8 LiLAC Group Net cash provided by operating activities $ 93.7 $ 121.7 $ 393.1 $ 227.5 Cash payments for direct acquisition and disposition costs 1.3 1.6 2.8 62.7 Expenses financed by an intermediary 9.5 1.1 56.9 1.1 Capital expenditures (199.2 ) (160.9 ) (447.5 ) (342.5 ) Principal payments on amounts financed by vendors and intermediaries (12.1 ) — (52.1 ) — Principal payments on certain capital leases (2.7 ) (2.8 ) (6.7 ) (3.5 ) Adjusted FCF $ (109.5 ) $ (39.3 ) $ (53.5 ) $ (54.7 )________________________________
6
For purposes of our consolidated statements of cash flows, expenses financed by an intermediary are treated as hypothetical operating cash outflows and hypothetical financing cash inflows when the expenses are incurred. When we pay the financing intermediary, we record financing cash outflows in our consolidated statements of cash flows. For purposes of our Adjusted Free Cash Flow definition, we add back the hypothetical operating cash outflow when these financed expenses are incurred and deduct the financing cash outflows when we pay the financing intermediary.
ARPU per Customer Relationship
The following table provides ARPU per customer relationship for the indicated periods:
Three months ended September 30, % FX-Neutral7 2017 2016 Change % Change Liberty Global Consolidated (excluding the Netherlands)8,9 $ 44.09 $ 42.44 3.9 % 1.2 % Liberty Global Group (excluding the Netherlands) € 36.64 € 37.08 (1.2 %) 1.2 % U.K. & Ireland (Virgin Media) £ 49.92 £ 49.90 — % (0.4 %) Germany (Unitymedia) € 25.25 € 24.45 3.3 % 3.3 % Belgium (Telenet) € 54.87 € 53.47 2.6 % 2.6 % Other Europe (UPC Holding) € 26.34 € 26.96 (2.3 %) (1.1 %) LiLAC Group8,9 $ 52.56 $ 50.90 3.3 % 1.8 % Chile (VTR) CLP 33,630 CLP 33,670 (0.1 %) (0.1 %) C&W8 $ 42.12 $ 40.38 4.3 % 5.0 % Puerto Rico9 $ 77.74 $ 78.12 (0.5 %) (0.5 %)___________________________
7 The FX-neutral change represents the percentage change on a year-over-year basis adjusted for FX impacts and is calculated by adjusting the prior-year figures to reflect translation at the foreign currency rates used to translate the current year amounts. 8 As a part of our ongoing effort to conform C&W's subscriber counting policies to our policies, we have reflected nonorganic reductions totaling 201,600 to C&W's customer count during the twelve months ended September 30, 2017. In order to provide a more meaningful comparison of ARPU, we have reflected all of these nonorganic reductions in the customer figures used to calculate ARPU for the three months ended September 30, 2017 and 2016. 9 In order to provide a more meaningful comparison of ARPU, the ARPU for the three months ended September 30, 2017 for Puerto Rico is based on the pre-hurricane results through August 31, 2017 only.Mobile ARPU
The following tables provide ARPU per mobile subscriber10 for the indicated periods:
ARPU per Mobile Subscriber Three months ended September 30, % FX-Neutral 2017 2016 Change % Change Liberty Global Group: Including interconnect revenue $ 19.49 $ 19.12 1.9 % (1.0 %) Excluding interconnect revenue $ 15.89 $ 15.86 0.2 % (2.6 %) LiLAC Group8: Including interconnect revenue $ 17.23 $ 17.91 (3.8 %) (3.9 %) Excluding interconnect revenue $ 16.01 $ 16.72 (4.2 %) (4.4 %)_______________________________
10 Our ARPU per mobile subscriber calculation that excludes interconnect revenue refers to the average monthly mobile subscription revenue per average mobile subscriber in service and is calculated by dividing the average monthly mobile subscription revenue (excluding activation fees, handset sales and late fees) for the indicated period, by the average of the opening and closing balances of mobile subscribers in service for the period. Our ARPU per mobile subscriber calculation that includes interconnect revenue increases the numerator in the above-described calculation by the amount of mobile interconnect revenue during the period. Consolidated Operating Data — September 30, 2017 VideoHomesPassed(1)
Two-wayHomesPassed(2)
Fixed-lineCustomerRelationships(3)
BasicVideoSubscribers(5)
EnhancedVideoSubscribers(6)
DTHSubscribers(7)
TotalVideo
InternetSubscribers(8)
TelephonySubscribers(9)
TotalRGUs(4)
TotalMobileSubscribers(11)
U.K. 13,798,600 13,786,800 5,418,200 — 3,822,300 — 3,822,300 5,080,100 4,455,800 13,358,200 2,975,500 Germany 12,956,800 12,856,400 7,176,300 4,723,800 1,653,900 — 6,377,700 3,430,800 3,204,800 13,013,300 333,600 Belgium/Luxembourg 3,307,100 3,307,100 2,201,800 255,700 1,791,200 — 2,046,900 1,670,400 1,302,500 5,019,800 2,882,100 Switzerland(10) 2,268,600 2,268,600 1,260,200 542,500 679,800 — 1,222,300 754,800 532,900 2,510,000 105,000 Austria 1,404,300 1,404,300 654,000 95,200 372,600 — 467,800 512,500 450,200 1,430,500 55,700 Ireland 880,400 838,700 455,600 26,400 270,900 — 297,300 371,400 358,200 1,026,900 44,400 Total Western Europe 34,615,800 34,461,900 17,166,100 5,643,600 8,590,700 — 14,234,300 11,820,000 10,304,400 36,358,700 6,396,300 Poland 3,262,700 3,203,900 1,426,400 192,300 1,016,500 — 1,208,800 1,123,000 626,500 2,958,300 4,300 Romania 3,051,500 3,008,100 1,321,900 263,800 663,400 355,100 1,282,300 568,700 519,600 2,370,600 — Hungary 1,764,400 1,746,900 1,109,200 100,600 577,000 269,900 947,500 664,900 621,700 2,234,100 81,400 Czech Republic 1,515,900 1,482,700 715,900 165,600 355,700 102,200 623,500 492,100 152,700 1,268,300 — Slovakia 600,800 581,200 269,200 25,700 138,600 75,800 240,100 128,300 76,800 445,200 — Total CEE 10,195,300 10,022,800 4,842,600 748,000 2,751,200 803,000 4,302,200 2,977,000 1,997,300 9,276,500 85,700 Total Liberty Global Group 44,811,100 44,484,700 22,008,700 6,391,600 11,341,900 803,000 18,536,500 14,797,000 12,301,700 45,635,200 6,482,000 Chile 3,360,700 2,868,100 1,395,300 69,900 998,800 — 1,068,700 1,164,500 640,500 2,873,700 206,200 Puerto Rico(12) 1,106,900 1,106,900 408,200 — 255,000 — 255,000 337,800 210,700 803,500 — Panama 535,100 510,200 186,600 — 45,600 34,000 79,600 105,100 127,100 311,800 1,743,200 Jamaica 433,500 423,500 262,500 — 97,200 — 97,200 153,700 206,600 457,500 930,500 Trinidad 315,100 315,100 157,200 — 108,300 — 108,300 123,400 46,400 278,100 — Barbados 123,700 123,700 85,000 — 16,800 — 16,800 60,800 74,500 152,100 124,300 Bahamas 128,900 128,900 49,500 — 5,900 — 5,900 26,200 49,500 81,600 266,100 Other C&W(12) 359,000 339,200 206,900 11,300 67,500 — 78,800 124,800 106,100 309,700 394,300 Total LiLAC Group 6,362,900 5,815,600 2,751,200 81,200 1,595,100 34,000 1,710,300 2,096,300 1,461,400 5,268,000 3,664,600 Grand Total 51,174,000 50,300,300 24,759,900 6,472,800 12,937,000 837,000 20,246,800 16,893,300 13,763,100 50,903,200 10,146,600 Subscriber Variance Table - September 30, 2017 vs June 30, 2017 VideoHomesPassed(1)
Two-wayHomesPassed(2)
Fixed-lineCustomerRelationships(3)
BasicVideo
Subscribers(5)
EnhancedVideoSubscribers(6)
DTHSubscribers(7)
TotalVideo
InternetSubscribers(8)
TelephonySubscribers(9)
TotalRGUs(4)
TotalMobileSubscribers(11)
U.K. 123,000 123,300 45,200 — 12,500 — 12,500 51,800 18,700 83,000 (20,100 ) Germany 21,200 25,300 1,300 (32,900 ) 21,100 — (11,800 ) 41,300 38,600 68,100 (6,800 ) Belgium/Luxembourg (20,900 ) (20,900 ) (10,600 ) (9,800 ) (5,300 ) — (15,100 ) 2,000 (1,500 ) (14,600 ) 43,400 Switzerland(10) 12,700 12,700 (11,200 ) (18,400 ) 7,900 — (10,500 ) 2,200 8,600 300 12,500 Austria 5,300 5,300 1,600 (4,400 ) 100 — (4,300 ) 4,000 8,500 8,200 8,500 Ireland 14,500 16,000 3,500 (1,100 ) 1,900 — 800 5,300 3,300 9,400 3,900 Total Western Europe 155,800 161,700 29,800 (66,600 ) 38,200 — (28,400 ) 106,600 76,200 154,400 41,400 Poland 38,600 39,900 (2,800 ) (5,900 ) 2,600 — (3,300 ) 5,500 (1,400 ) 800 (300 ) Romania 66,700 67,300 24,800 9,700 8,500 3,000 21,200 15,000 16,400 52,600 — Hungary 15,900 15,900 (2,000 ) (8,800 ) 13,300 (8,000 ) (3,500 ) 10,300 16,600 23,400 6,700 Czech Republic 17,200 17,300 300 6,100 400 (2,900 ) 3,600 5,700 — 9,300 — Slovakia 4,700 4,700 300 400 200 (400 ) 200 1,300 (400 ) 1,100 — Total CEE 143,100 145,100 20,600 1,500 25,000 (8,300 ) 18,200 37,800 31,200 87,200 6,400Total Liberty Global Group
298,900 306,800 50,400 (65,100 ) 63,200 (8,300 ) (10,200 ) 144,400 107,400 241,600 47,800 Chile 41,400 50,900 19,800 (3,100 ) 6,700 — 3,600 21,100 (5,700 ) 19,000 13,200 Puerto Rico(12) 3,300 3,300 2,300 — (3,700 ) — (3,700 ) 3,600 400 300 — Panama 6,700 38,100 (1,000 ) — 400 (2,200 ) (1,800 ) 3,800 2,600 4,600 (22,100 ) Jamaica 7,000 7,000 1,300 — 2,000 — 2,000 5,500 10,400 17,900 (3,400 ) Trinidad 2,200 2,200 (3,900 ) — (3,300 ) — (3,300 ) — 8,400 5,100 — Barbados 600 600 (12,400 ) — (600 ) — (600 ) (1,100 ) (3,100 ) (4,800 ) (1,300 ) Bahamas — — (2,500 ) — 400 — 400 (1,000 ) (2,500 ) (3,100 ) (19,100 ) Other C&W(12) 2,700 2,700 200 — (500 ) — (500 ) 2,800 (1,800 ) 500 3,000 Total LiLAC Group 63,900 104,800 3,800 (3,100 ) 1,400 (2,200 ) (3,900 ) 34,700 8,700 39,500 (29,700 ) Grand Total 362,800 411,600 54,200 (68,200 ) 64,600 (10,500 ) (14,100 ) 179,100 116,100 281,100 18,100 Continued below Subscriber Variance Table - September 30, 2017 vs June 30, 2017 VideoHomesPassed(1)
Two-wayHomes Passed(2)
Fixed-lineCustomer Relationships(3)
BasicVideo Subscribers(5)
EnhancedVideo Subscribers(6)
DTH Subscribers(7) TotalVideo Internet Subscribers(8) Telephony Subscribers(9) Total RGUs(4)TotalMobile Subscribers(11)
Organic Change Summary:
U.K. 123,000 123,300 45,200 — 12,500 — 12,500 51,800 18,700 83,000 (20,100 ) Germany 21,200 25,300 1,300 (32,900 ) 21,100 — (11,800 ) 41,300 38,600 68,100 (6,800 ) Belgium/Luxembourg 8,500 8,500 (10,600 ) (9,800 ) (5,300 ) — (15,100 ) 2,000 (1,500 ) (14,600 ) 43,400 Other Europe 153,600 157,100 (6,400 ) (36,200 ) 28,100 (8,300 ) (16,400 ) 37,800 46,500 67,900 31,300 Total Liberty Global Group 306,300 314,200 29,500 (78,900 ) 56,400 (8,300 ) (30,800 ) 132,900 102,300 204,400 47,800 Chile 41,400 50,900 19,800 (3,100 ) 6,700 — 3,600 21,100 (5,700 ) 19,000 13,200 Puerto Rico(12) 3,300 3,300 2,300 — (3,700 ) — (3,700 ) 3,600 400 300 — Panama 6,700 38,100 (1,000 ) — 400 (2,200 ) (1,800 ) 3,800 2,600 4,600 (22,100 ) Jamaica 7,000 7,000 1,300 — 2,000 — 2,000 5,500 10,400 17,900 (3,400 ) Trinidad 2,200 2,200 (3,900 ) — (3,300 ) — (3,300 ) — 8,400 5,100 — Barbados 600 600 (12,400 ) — (600 ) — (600 ) (1,100 ) (3,100 ) (4,800 ) (1,300 ) Bahamas — — (2,500 ) — 400 — 400 (1,000 ) (2,500 ) (3,100 ) (19,100 ) Other C&W(12) 2,700 2,700 200 — (500 ) — (500 ) 2,800 (1,800 ) 500 3,000 Total LiLAC Group 63,900 104,800 3,800 (3,100 ) 1,400 (2,200 ) (3,900 ) 34,700 8,700 39,500 (29,700 ) Total Organic Change 370,200 419,000 33,300 (82,000 ) 57,800 (10,500 ) (34,700 ) 167,600 111,000 243,900 18,100Q3 2017 Adjustments:
Q3 2017 Acquisition - Switzerland — — 6,000 — 5,800 — 5,800 5,900 4,100 15,800 — Q3 2017 Acquisition - Hungary 2,000 2,000 1,200 100 1,000 — 1,100 800 1,000 2,900 — Q3 2017 Acquisition - Romania 20,000 20,000 13,700 13,700 — — 13,700 4,800 — 18,500 — Q3 2017 Belgium adjustments (29,400 ) (29,400 ) — — — — — — — — — Net Adjustments (7,400 ) (7,400 ) 20,900 13,800 6,800 — 20,600 11,500 5,100 37,200 — Net Adds (Reductions) 362,800 411,600 54,200 (68,200 ) 64,600 (10,500 ) (14,100 ) 179,100 116,100 281,100 18,100Footnotes for Operating Data and Subscriber Variance Tables
1 Homes Passed are homes, residential multiple dwelling units or commercial units that can be connected to our networks without materially extending the distribution plant, except for DTH homes. Certain of our Homes Passed counts are based on census data that can change based on either revisions to the data or from new census results. We do not count homes passed for DTH. Due to the fact that we do not own the partner networks (defined below) used in Switzerland (see note 10) we do not report homes passed for Switzerland’s partner networks. 2 Two-way Homes Passed are Homes Passed by those sections of our networks that are technologically capable of providing two-way services, including video, internet and telephony services. 3 Fixed-line Customer Relationships are the number of customers who receive at least one of our video, internet or telephony services that we count as Revenue Generating Units (“RGUs”), without regard to which or to how many services they subscribe. To the extent that RGU counts include equivalent billing unit (“EBU”) adjustments, we reflect corresponding adjustments to our Customer Relationship counts. For further information regarding our EBU calculation, see Additional General Notes to Tables. Customer Relationships generally are counted on a unique premises basis. Accordingly, if an individual receives our services in two premises (e.g., a primary home and a vacation home), that individual generally will count as two Customer Relationships. We exclude mobile-only customers from Customer Relationships. 4 RGU is separately a Basic Video Subscriber, Enhanced Video Subscriber, DTH Subscriber, Internet Subscriber or Telephony Subscriber (each as defined and described below). A home, residential multiple dwelling unit, or commercial unit may contain one or more RGUs. For example, if a residential customer in our Austrian market subscribed to our enhanced video service, fixed-line telephony service and broadband internet service, the customer would constitute three RGUs. Total RGUs is the sum of Basic Video, Enhanced Video, DTH, Internet and Telephony Subscribers. RGUs generally are counted on a unique premises basis such that a given premises does not count as more than one RGU for any given service. On the other hand, if an individual receives one of our services in two premises (e.g., a primary home and a vacation home), that individual will count as two RGUs for that service. Each bundled cable, internet or telephony service is counted as a separate RGU regardless of the nature of any bundling discount or promotion. Non-paying subscribers are counted as subscribers during their free promotional service period. Some of these subscribers may choose to disconnect after their free service period. Services offered without charge on a long-term basis (e.g., VIP subscribers or free service to employees) generally are not counted as RGUs. We do not include subscriptions to mobile services in our externally reported RGU counts. In this regard, our September 30, 2017 RGU counts exclude our separately reported postpaid and prepaid mobile subscribers. 5 Basic Video Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our video service over our broadband network either via an analog video signal or via a digital video signal without subscribing to any recurring monthly service that requires the use of encryption-enabling technology. Encryption-enabling technology includes smart cards, or other integrated or virtual technologies that we use to provide our enhanced service offerings. With the exception of RGUs that we count on an EBU basis, we count RGUs on a unique premises basis. In other words, a subscriber with multiple outlets in one premises is counted as one RGU and a subscriber with two homes and a subscription to our video service at each home is counted as two RGUs. In Europe, we have approximately 186,400 “lifeline” customers that are counted on a per connection basis, representing the least expensive regulated tier of video cable service, with only a few channels. 6 Enhanced Video Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our video service over our broadband network or through a partner network via a digital video signal while subscribing to any recurring monthly service that requires the use of encryption-enabling technology. Enhanced Video Subscribers that are not counted on an EBU basis are counted on a unique premises basis. For example, a subscriber with one or more set-top boxes that receives our video service in one premises is generally counted as just one subscriber. An Enhanced Video Subscriber is not counted as a Basic Video Subscriber. As we migrate customers from basic to enhanced video services, we report a decrease in our Basic Video Subscribers equal to the increase in our Enhanced Video Subscribers. Subscribers to enhanced video services provided by our operations in Switzerland over partner networks receive basic video services from the partner networks as opposed to our operations. 7 DTH Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our video programming broadcast directly via a geosynchronous satellite. 8 Internet Subscriber is a home, residential multiple dwelling unit or commercial unit that receives internet services over our networks, or that we service through a partner network. Our Internet Subscribers exclude 40,700 digital subscriber line (“DSL”) subscribers within Austria that are not serviced over our networks. Our Internet Subscribers do not include customers that receive services from dial-up connections. In Switzerland, we offer a 2 Mbps internet service to our Basic and Enhanced Video Subscribers without an incremental recurring fee. Our Internet Subscribers in Switzerland include 86,500 subscribers who have requested and received this service. 9 Telephony Subscriber is a home, residential multiple dwelling unit or commercial unit that receives voice services over our networks, or that we service through a partner network. Telephony Subscribers exclude mobile telephony subscribers. Our Telephony Subscribers exclude 31,300 subscribers within Austria that are not serviced over our networks. In Switzerland, we offer a basic phone service to our Basic and Enhanced Video Subscribers without an incremental recurring fee. Our Telephony Subscribers in Switzerland include 122,900 subscribers who have requested and received this service. 10 Pursuant to service agreements, Switzerland offers enhanced video, broadband internet and telephony services over networks owned by third-party cable operators (“partner networks”). A partner network RGU is only recognized if there is a direct billing relationship with the customer. At September 30, 2017, Switzerland’s partner networks account for 139,300 Customer Relationships, 313,000 RGUs, 112,800 Enhanced Video Subscribers, 115,600 Internet Subscribers, and 84,600 Telephony Subscribers. 11 Our mobile subscriber count represents the number of active subscriber identification module (“SIM”) cards in service rather than services provided. For example, if a mobile subscriber has both a data and voice plan on a smartphone this would equate to one mobile subscriber. Alternatively, a subscriber who has a voice and data plan for a mobile handset and a data plan for a laptop (via a dongle) would be counted as two mobile subscribers. Customers who do not pay a recurring monthly fee are excluded from our mobile telephony subscriber counts after periods of inactivity ranging from 30 to 90 days, based on industry standards within the respective country. In a number of countries, our mobile subscribers receive mobile services pursuant to prepaid contracts. As of September 30, 2017, the prepaid mobile subscriber count included the following: Panama (1,581,400), Jamaica (911,200), Belgium (623,300), U.K. (544,700), Bahamas (238,200), Barbados (96,900), Chile (6,900) and twelve remaining C&W geographies (336,100). 12 During September 2017, Hurricanes Irma and Maria caused significant damage to our operations in Puerto Rico, as well as certain geographies within CWC, including the British Virgin Islands and Dominica, and to a lesser extent Turks & Caicos, the Bahamas, Anguilla, Antigua and other smaller markets, resulting in disruptions to our telecommunications services within these islands. With the exception of the Bahamas, all of these CWC markets are included in the “Other LiLAC Group” category in the accompanying table. The homes passed and subscriber counts for Puerto Rico, British Virgin Islands, Dominica, Anguilla and Turks & Caicos reflect the pre-hurricane homes passed and subscriber counts as of August 31, 2017 as we are still in the process of assessing the impacts of the hurricanes on our networks and subscriber counts in these markets. As of October 25, 2017, we estimate that we have been able to restore services to a small portion of our fixed-line customers in Puerto Rico, and to less than half of our aggregate fixed-line customers in the British Virgin Islands, Dominica, Anguilla and Turks & Caicos. While mobile services have been largely restored in these markets, we are still in the process of completing the restoration of our mobile network infrastructure.Additional General Notes to Tables:
Most of our broadband communications subsidiaries provide telephony, broadband internet, data, video or other B2B services. Certain of our B2B revenue is derived from small or home office (“SOHO”) subscribers that pay a premium price to receive enhanced service levels along with video, internet or telephony services that are the same or similar to the mass marketed products offered to our residential subscribers. All mass marketed products provided to SOHOs, whether or not accompanied by enhanced service levels and/or premium prices, are included in the respective RGU and customer counts of our broadband communications operations, with only those services provided at premium prices considered to be “SOHO RGUs” or “SOHO customers.” To the extent our existing customers upgrade from a residential product offering to a SOHO product offering, the number of SOHO RGUs or SOHO customers will increase, but there is no impact to our total RGU or customer counts. Due to system limitations, SOHO customers of C&W are not included in our respective RGU and customer counts as of September 30, 2017. With the exception of our B2B SOHO subscribers, we generally do not count customers of B2B services as customers or RGUs for external reporting purposes.
Certain of our residential and commercial RGUs are counted on an EBU basis, including residential multiple dwelling units and commercial establishments, such as bars, hotels, and hospitals, in Chile and Puerto Rico and certain commercial and residential multiple dwelling units in Europe (with the exception of Germany and Belgium, where we do not count any RGUs on an EBU basis). Our EBUs are generally calculated by dividing the bulk price charged to accounts in an area by the most prevalent price charged to non-bulk residential customers in that market for the comparable tier of service. As such, we may experience variances in our EBU counts solely as a result of changes in rates. In Germany, homes passed reflect the footprint and two-way homes passed reflect the technological capability of our network up to the street cabinet, with drops from the street cabinet to the building generally added, and in-home wiring generally upgraded, on an as needed or success-based basis. In Belgium, Telenet leases a portion of its network under a long-term capital lease arrangement. These tables include operating statistics for Telenet's owned and leased networks.
While we take appropriate steps to ensure that subscriber statistics are presented on a consistent and accurate basis at any given balance sheet date, the variability from country to country in (i) the nature and pricing of products and services, (ii) the distribution platform, (iii) billing systems, (iv) bad debt collection experience and (v) other factors add complexity to the subscriber counting process. We periodically review our subscriber counting policies and underlying systems to improve the accuracy and consistency of the data reported on a prospective basis. Accordingly, we may from time to time make appropriate adjustments to our subscriber statistics based on those reviews.
Subscriber information for acquired entities, including C&W, is preliminary and subject to adjustment until we have completed our review of such information and determined that it is presented in accordance with our policies.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171101006911/en/
Liberty Global plcInvestor RelationsOskar Nooij, +1 303 220 4218orChristian Fangmann, +49 221 8462 5151orJohn Rea, +1 303 220 4238orCorporate CommunicationsMatt Beake, +44 20 8483 6428orRebecca Pike, +44 20 8483 6216www.libertyglobal.com
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